Protecting Your Home From Mother Nature

Protecting Your Home From Mother Nature

Heat waves, droughts, floods, earthquakes, wildfires, tornadoes and hurricanes torment Americans every year. During 2011-2013 the U.S. experienced 25 weather- and climate-related disasters, costing $175 billion in total damages, according to the National Oceanic and Atmospheric Administration.

Not everyone can pack up and move to Michigan – one of the states with the fewest occurrences of natural disasters – but there are steps you can take to prepare your home in the event a natural disaster strikes.

Scenario: Your home is located in a flood zone.

• First and foremost, make sure you have flood insurance because standard homeowners and renters insurance policies usually don’t cover flooding. Flood insurance policies are available through the National Flood Insurance Program and typically have a 30-day waiting period from the date of purchase before they go into effect.
• Elevate furnaces, water heaters and electrical components (switches, sockets, circuit breakers, and wiring) at least 12 inches above your home’s projected flood elevation and make sure they’re secured to a solid structure.
• Anchor any fuel tanks.
• Consider constructing barriers to prevent water from entering the building, as well as sealing basement walls with waterproofing compounds.
• Locate the main power switch for utilities, as well as the main gas valve, in case you need to disconnect and close them during a storm.

Scenario: The area where you live is subject to hurricanes.

• Learn the elevation level of your property and whether the land is prone to flooding to help determine if your home will be affected during a storm surge or tidal flooding. If flooding is a concern, as in the scenario above, be sure you have flood insurance.
• Install storm shutters or laminated glass with impact-resistant glazing to protect windows during a storm. An alternative is to board up windows with plywood once a storm is predicted.
• Make sure trees and shrubs on your property are well-trimmed to make them more wind-resistant.
• Have a generator on-site in case of power outage.
• Note what outdoor furniture, decorations and other miscellaneous items would need to be brought indoors before a storm.
• Reinforce your garage doors to mitigate potentially dangerous and expensive structural damage.
• Locate the main power switch for utilities, as well as the main gas valve, in case you need to disconnect and close them during a storm.
• Clear gutters and downspouts of debris.

Scenario: A tornado might form.

There are more than 1,000 tornadoes a year, on average, in the U.S.

• Learn the difference between a tornado watch and a tornado warning.
• Prepare for high winds by removing diseased and damaged limbs from trees.
• Identify a safe room within your home where family members should gather during a storm. Ideally, this is a basement, storm cellar or interior room on the ground floor with no windows.
• Secure or move indoors any outdoor items that may become projectiles, like furniture, potted plants and trash cans.

Scenario: Hot, dry conditions may spark a wildfire.

• Plant fire-resistant plants and shrubs.
• Install fire-resistant roofing materials.
• Regularly clean your roof and gutters and mow the lawn, clearing away clippings and dry twigs immediately.
• Keep garden hoses attached to faucets to aid fire personnel.
• Set aside household items like rakes, axes, saws, buckets and shovels that can be used as fire tools.
• Consider installing protective shutters or heavy, fire-resistant drapes.
• Mercury Insurance offers additional tips to help plan ahead and protect your home in the event of a wildfire.
• Install screens over attic vents with a mesh size of 1/8 inch.

Scenario: An earthquake might occur.

• Fasten shelves securely to walls and make sure large or heavy items are stored on lower shelves.
• Secure heavy items to walls (pictures and mirrors) away from beds and areas where people sit.
• Hire a professional to repair defective wiring and leaky gas connections. Also seek professional help to look for signs of structural damage and to repair deep cracks in ceilings and the foundation.
• Locate safe spots in each room under a sturdy table or against an inside wall.
• Keep a wrench near your main gas valve and learn how to turn it off.
• Secure water heaters, furnaces, gas appliances and furniture by bolting them to wall studs.
• Install cabinet latches to prevent them from opening and spilling contents, such as dishes and glassware.

Before any type of disaster strikes, you should also have an emergency plan in place for your family that includes a designated meeting place, emergency contact numbers and evacuation plan. Practice your plan at least twice a year to keep it fresh in everyone’s minds and make adjustments as needed. And if you have a pet, incorporate them into your evacuation plan, too.

You should also have an emergency kit that is easily accessible and includes basic survival items.

• One gallon of water per person
• Non-perishable food
• Battery-powered or hand-crank radio (and extra batteries)
• Flashlight
• First-aid kit
• Whistle to signal for help
• Can opener
• Blankets
• Wrench or pliers to turn off utilities
• Portable charging station for cell phones

FEMA recommends keeping three-day supplies of food and water for each family member.

Consider packing prescription medications, glasses, important financial documents, copies of insurance policies (and your agent’s contact information), a recent copy of your household inventory, birth certificates, social security cards and other identification in a portable waterproof container. It’s also a good idea to include $500 cash in small bills since ATMs and credit card processing units may be inaccessible during a power outage.

If you’re affected by a natural disaster, take the following steps to facilitate the claims process:

When filing a claim

• Contact your insurance provider immediately to report a loss.
• Be prepared to provide your policy number.
• Do not remove debris or damaged property that may be related to your claim.

Steps after filing a claim

• Prepare a detailed inventory of destroyed or damaged property.
• Offer photos or videotapes of your home and possessions to your adjuster, if these are available.
• Keep copies of communications between you and your adjuster.
• Keep records and receipts for additional living expenses that were incurred if you were forced to leave your home and provide copies to your adjuster.

Ready.gov, FEMA and the American Red Cross offer additional tips for protecting your home and family before, during and after a disaster.

Thursday, 3 December 2015 | MYT 11:46 AM Malaysia’s insurers strongly capitalized, says Fitch

KUALA LUMPUR : Malaysia’s insurance and takaful sector is set to remain stable in 2016 as their strong capitalisation will support premium growth and cope with potential underwriting volatility as economic growth decelerates, says Fitch Ratings.
In a new outlook report for the sector next year issued on Thursday, it said the strong capital position for Malaysia’s insurers was built on a robust regulatory framework ahead of the full liberalisation and economic integration with other Southeast Asian economies.
This was evidenced by the industry’s robust consolidated risk based capital ratio of 239% in the first half of this year (1H15), which was well beyond the regulatory minimum of 130%, according to Fitch.
The ratings house believed that stable domestic demand and low insurance penetration would continue to support the general insurance and takaful industries despite a slower premium growth in 1H15 associated with lower automobile sales and lower consumption spending.

“The growth in investment-linked policies is likely to stay strong given the low interest rates, but we expect life insurers to increasingly tap on health-related and retirement products as the population ages and medical costs rise,” it says.
As for the auto industry, Fitch said that the deregulation of tariffs in 2016 will have a mixed impact.
Motor insurers were likely to benefit from greater flexibility in pricing their risks adequately, but it could trigger competitive pricing among fire insurers and erode bottom-line profitability, it explained.

TAGS / KEYWORDS:Business News , Economy , insurance , takaful

Call For Better Insurance Solutions For Malaysians Premalatha JayaramanThursday, October 8, 2015

The introduction of the life insurance and family takaful framework, and the liberalisation of the fire and motor tariffs will solidify the sector and improve innovation, said Bank Negara Malaysia (BNM) deputy governor Datuk Muhammad Ibrahim.

“Our goal remains unchanged, to ensure Malaysians have the opportunity to avail themselves of efficient and effective means to manage risks with insurance and takaful solutions that are appropriate for their circumstances,” he said at the 5th Malaysia Insurance Summit organised by the Malaysian Insurance Institute in Kuala Lumpur yesterday.

The central bank aims to increase the penetration for life insurance and family takaful from 56% currently to 75% by 2020, measured by the number of policies in force against population.

“This is envisaged in the Economic Transformation Programme and this target is certainly achievable,” he said.

Muhammad Ibrahim said product innovation remains key to achieve the target, particularly in the micro-insurance and micro-takaful spaces which should reach the underserved segment of the society.

In the non-life or general insurance (GI) space, he said a more market-driven pricing structure will be introduced for motor and fire insurance.

He said this will pave the way for the development of products that can be more responsive to consumer and business needs.

Importantly, he said this development will be critically dependent on insurance and takaful companies building strong internal underwritings and risk-pricing practices to ensure the sustainability of the business, particularly in the highly competitive motor insurance segment.

“Let me re-emphasise the importance of this development to our market and the criticality to remove the current market distortions that undermine the long-term sustainability of motor insurance,” he said, adding that the industry cannot afford to take a short-term view.

He said it must keep its sights on building the foundations for operating in a more diverse and mature market, with stronger value propositions for consumers.

“Presently, with the high volume of vehicles referred to by the industry, the Malaysian Motor Insurance Pool (MMIP) has a life of its own and I was told the MMIP is the 9th largest GI in Malaysia.

“This was never the intent. Let’s revert to its original mandate as a mechanism to insure the highest risks motor vehicles,” he said.

Towards this end, he said insurers and takaful operators must be fully accountable for the conduct of their intermediaries in ensuring that customers receive proper advice and quality service throughout the duration of the policy.

He said it is important that adequate training is provided and the right remuneration and incentive structure is implemented to promote a committed and professional agency force.

“Conduct issues are viewed seriously by BNM and we are fully committed to the responsibility entrusted to the central bank to effectively enforce regulatory requirements on fair conduct towards consumers,” he said.

Motor, fire insurance pricing to be market-driven, says Bank Negara

Motor, fire insurance pricing to be market-driven, says Bank Negara - See more at: http://www.themalaysianinsider.com/malaysia/article/motor-fire-insurance-pricing-to-be-market-driven-says-bank-negara#sthash.Hk3DtCo1.dpuf

The motor and fire insurance sectors will be restructured with more market-driven pricing, Bank Negara Malaysia (BNM) deputy governor Datuk Muhammad Ibrahim said today.

He said this would pave the way for the development of products that are more responsive to consumer and business needs in the two most dominant lines of business in the Malaysian general insurance sector.

"Importantly, this development will be critically dependent on insurance and takaful companies building strong internal underwriting and risk pricing practices to ensure the sustainability of the business, particularly in the highly competitive motor insurance segment," he said in his keynote address at the 5th Malaysia Insurance Summit in Kuala Lumpur.

He said the development is critical to remove the current market distortions that undermine the long-term sustainability of motor insurance.

"The industry cannot afford to take a short-term view, it must keep its sights on building the foundations for operating in a more diverse and mature market, with stronger value propositions for consumers," he said.

Muhammad said the other major development in Malaysia is the introduction of the Life Insurance and Family Takaful Framework.

He said the life insurance and family takaful sector's focus is to increase the penetration level, as measured by the number of policies in force per population, from 56% currently to 75% by 2020 as envisaged in the Economic Transformation Programme.

"Product innovation remains key to achieving this target, particularly in the ^{micro-insurance and micro-takaful} space which would expand the reach to the underserved segments of society," he added.

Muhammad said both these initiatives would allow the industry greater operational flexibility to innovate, while ensuring that consumers' interests remain adequately protected.

"Our goal remains unchanged – to ensure Malaysians have the opportunity to avail themselves of efficient and effective means to manage risks with insurance and takaful solutions that are appropriate for their circumstances," he said.

He said in tandem with these developments, insurers and takaful operators must be fully accountable for the conduct of their intermediaries in ensuring that customers receive proper advice and quality service throughout the duration of the policy.

He added that it is important for adequate training to be provided and the right remuneration and incentive structure is implemented to promote a committed and professional agency force.

Muhammad said the Financial Services Act provides the central bank with explicit and expanded enforcement powers, including monetary and non-monetary actions in addition to private and public reprimand as well as direction to make restitution to aggrieved parties.

He said as a result of supervisory interventions by BNM, more than RM30 million in premiums were refunded to the affected policyholders due to mis-selling practices in the sale of life insurance products in the past.

"The enforcement measures undertaken signal the central bank’s low level of tolerance for misconduct.

"It also serves to remind the industry of BNM's expectation for common complaints and grouses against the industry such as delay in claim settlement and mis-selling practices by agents to be completely eliminated or at the very least reduced significantly," he added. – Bernama, October 7, 2015.

- See more at: http://www.themalaysianinsider.com/malaysia/article/motor-fire-insurance-pricing-to-be-market-driven-says-bank-negara#sthash.Hk3DtCo1.dpuf

45 3 2 54 BNM: Motor, fire insurance to be restructured October 8, 2015

The development is critical to remove the current market distortions that undermine the long-term sustainability of motor insurance.

KUALA LUMPUR: The motor and fire insurance sectors will be restructured with more market-driven pricing, Deputy Bank Negara Malaysia (BNM) Governor Muhammad Ibrahim said.

He said this would pave the way for the development of products that are more responsive to consumer and business needs in the two most dominant lines of business in the Malaysian general insurance sector.

“Importantly, this development will be critically dependent on insurance and takaful companies building strong internal underwriting and risk pricing practices to ensure the sustainability of the business, particularly in the highly competitive motor insurance segment,” he said in his keynote address at the 5th Malaysia Insurance Summit here yesterday.

He said the development was critical to remove the current market distortions that undermine the long-term sustainability of motor insurance.

“The industry cannot afford to take a short-term view, it must keep its sights on building the foundations for operating in a more diverse and mature market, with stronger value propositions for consumers,” he said.

Muhammad said the other major development in Malaysia was the introduction of the Life Insurance and Family Takaful Framework.

He said the life insurance and family takaful sector’s focus was to increase the penetration level, as measured by the number of policies in force per population, from 56 per cent currently to 75 per cent by 2020 as envisaged in the Economic Transformation Programme.

“Product innovation remains key to achieving this target, particularly in the micro-insurance and micro-takaful space which would expand the reach to the under-served segments of society,” he added.

Muhammad said both these initiatives would allow the industry greater operational flexibility to innovate, while ensuring that consumers’ interests remain adequately protected.

“Our goal remains unchanged — to ensure Malaysians have the opportunity to avail themselves of efficient and effective means to manage risks with insurance and takaful solutions that are appropriate for their circumstances,” he said.

He said in tandem with these developments, insurers and takaful operators must be fully accountable for the conduct of their intermediaries in ensuring that customers receive proper advice and quality service throughout the duration of the policy.

He added that it was important for adequate training to be provided and the right remuneration and incentive structure implemented to promote a committed and professional agency force.

Muhammad said the Financial Services Act provided the central bank with explicit and expanded enforcement powers, including monetary and non-monetary actions in addition to private and public reprimand as well as direction to make restitution to aggrieved parties.

He said as a result of supervisory interventions by BNM, more than RM30 million in premiums were refunded to affected policyholders due to mis-selling practices in the sale of life insurance products in the past.

“The enforcement measures undertaken signal the Bank’s low level of tolerance for misconduct.

“It also serves to remind the industry of BNM’s expectation for common complaints and grouses against the industry such as delays in claim settlement and mis-selling practices by agents to be completely eliminated or at the very least reduced significantly,” he added.

– BERNAMA

NIKO Insurance becomes Sanlam General Insurance

KAMPALA, Uganda - NIKO Insurance, a general insurer in Uganda, announced last week it rebranded to Sanlam General Insurance when Sanlam, a South African based financial services group became the Majority shareholder in NIKO. 

“We look forward to using this opportunity to strengthen our business relations with our clients, partners and associates and to further entrench the Sanlam way of doing business to a wider range of clients,” Gary Corbit, the Chief Executive Officer, Sanlam General Insurance said, in a news conference.

He said the rebranding will give clients the added comfort and security of doing business with the company that is well known in many African markets as a leader in general insurance, wealth creation, management and protection. Sanlam is a respected financial services group with footprint in 12 African countries outside South Africa, as well as in India, Malaysia, the USA, UK and Australia. 

Sanlam General Insurance started operations in Uganda in 2004 as NIKO and offers a broad range of general insurance products for both personal and corporate clients.  Gary said, for clients, shareholders, brokers and employees, the rebranding will enhance the existing benefits of the company’s partnership with Sanlam, giving access to the larger group’s financial strength, technical expertise and brand equity. It will also enable the insurer to offer more innovative and accessible products to additional segments of the Uganda population.

Sanlam holds 84% stake in NIKO Insurance, (79% direct and 5% indirect via NIKO Holdings) through its subsidiary, Sanlam Emerging Markets which is responsible for Sanlam’s financial business services in emerging markets outside South Africa. 

Gary said the rebranding is in line with Sanlam Group’s focus on strengthening its identity and expanding its visibility on the continent in general and East Africa in particular. In neighbouring Tanzania, leading life assurer, Sanlam Life Insurance, formerly African Life launched its new Sanlam branding in August. Sanlam also has businesses in Kenya and Rwanda.

Sanlam Life Insurance in Uganda has also announced thay it will undergo a brand refresh including a rejuvenated logo to align with the mother brand and its sister company Sanlam General Insurance. Sanlam Life Insurance started operations in Uganda during 200 and is wholly owned by Sanlam.

Sanlam Insurance holds 16.7% market share of life business in Uganda, with the largest individual life book in the industry in terms of lives assured (over 18,000) and tens of thousands under group, credit life and medical schemes. Gross premiums in the last financial year totalled over $4.95 million and the company has won several awards, including Best Informed Insurere in 2015 and Life Agent of the Year 2014.

Since 1918, Sanlam has been a prominent part of the South African business landscape.  The Sanlam Group has a direct presence in 11 African countries, India, Malaysia and with niche businesses in certain developed markets.  The Group is a diversified financial services business with assets under management of more than $65.83 billion ‘We have the largest Pan African footprint of insurance groups based on number of countries and contribution to the overall consolidated Group’.

By Sam Okwakol, Sunday, September 27th, 2015

Legally Speaking - The extent of an insurer’s liability in a third party claim Posted on 5 May 2015

IN Malaysia, it is mandatory under the Road Transport Act 1987 (RTA) for you to insure your vehicle against damage and/or third party risks. A third party insurance policy insures you against risks such as death and injury to a third party as well as damage to the third party's property. This article will discuss the extent of an insurer's liability in a third party policy claim following the recent Court of Appeal case of Pacific & Orient Insurance Co. Bhd and Kamacheh a/p Karuppen on March 6, 2015. Specifically, this article considers whether an insurer is liable to pay the third party if, at the time of the accident, the insured vehicle was used for illegal purposes.

Brief facts of the case

On March 2009, Kamacheh was riding her motorcycle when a pillion rider on another motorcycle snatched her handbag from behind. She tried to resist and, as a result, fell off her motorcycle and sustained injuries. The other motorcycle was ridden by the son of the insured which was covered by Pacific Orient. Kamacheh filed a civil claim against the pillion rider and the son of the insured for the injuries sustained by her in the Sessions Court. Pacific Orient had repudiated the insurance policy after realising that the insured had breached the terms and conditions of the policy. On March 2011, Kamacheh obtained a judgement in default against both the pillion rider and the son of the insured. Damages were assessed by the Sessions Court in the sum of RM219,112. As no payment was made either by the pillion rider or the son of the insured, Kamacheh sent the sealed copy of the judgement to Pacific Orient. However, Pacific Orient did not make any payment to Kamacheh, and she later commenced a recovery action against Pacific Orient for the full judgement sum of RM219,112.

Liability of the insurer for the injuries caused to a third party

Both the Sessions Court and the High Court held that Pacific Orient was liable to pay the sum of RM219,112 to Kamacheh because there is a statutory obligation under section 96 of the RTA requiring an insurer to pay (Kamacheh) the judgement sum. Section 91(1)(b) of the RTA stipulates that a policy of insurance must be a policy which insures such person or class of persons as may be specified in the policy in respect of any liability which may be incurred by him or them in respect of the death of, or bodily injury to, any person caused by or arising out of the use of the motor vehicle.

The judges agreed that the word "arising out of the use of the motor vehicle" connotes not only the actual driving of the vehicle but also the use of the vehicle on the road. Furthermore, as the liability of Pacific Orient is statutory in nature, there was nothing in the RTA that could exempt Pacific Orient from its liability to pay Kamacheh even though, at the time of the incident, the motorcycle was used for an illegal purpose. The Court of Appeal held that Section 91(1)(b) also included liability for damages arising from acts of a criminal nature. In any event, the court held that Kamacheh's injuries were indeed caused by or arose out of the insured's use of his motorcycle and that there is nothing in the RTA that restricts the right of a third party to make a claim arising out of the use of the vehicle in the commission of a criminal act.

Conclusion

Whilst this case appears to allow an insured to avoid the personal liability of paying an aggrieved third party by "transferring" his liability to the insurer, the courts will not allow an insured to profit from his wrongful actions. In the event a third party obtains judgment against an insured, the insured, if he is at fault, would not be entitled to claim against his insurer. The objective of the law is to protect the third party who has suffered loss and not the insured, if he is at fault, whose asset may be insufficient to satisfy the losses suffered by the third party. Therefore, the insured's (in)ability to pay damages to the third party is mitigated or "insured" by the insurer. It is unsurprising that the courts decided in favour of the third party given the reasons above. The position taken by the courts mirror the law in other countries such as Singapore, the United Kingdom and India. Whether or not this decision will now cause Malaysian insurers to raise insurance premiums remains to be seen, and if premiums are increased, whether this would run afoul of the Price Control and Anti-Profiteering Act 2011.

Contributed by Nur Ayuni binti Ab Rahim of Christopher & Lee Ong (www.christopherleeong.com).

- See more at: http://www.thesundaily.my/news/1407702#sthash.JAaCr80V.dpuf

Fitch: Reforms Prepare Malaysian Insurers for Liberalised Market Sun Apr 19, 2015 11:16pm EDT

http://www.reuters.com/article/2015/04/20/idUSFit91712520150420

(The following statement was released by the rating agency) Link to Fitch Ratings' Report: Malaysian Insurance Market Dashboard 2015 here SINGAPORE, April 19 (Fitch) Fitch Ratings says in a new report that ongoing regulatory developments will enhance the Malaysian insurance sector's global competitiveness as it transitions into a liberalised market. With intensified market competition, under-capitalised insurers and takaful operators are likely to seek strategic investors or alternative capital to meet their capital needs.

Fitch believes the level of M&A activities will persist in the near term, given the attractive growth prospects in Malaysia's insurance industry. General insurers' underwriting performance is expected to remain steady due to favourable margins in fire and non-motor classes. This will offset the pressure from adverse claims experience in the compulsory motor class despite gradual tariff increases over the years. The claims exposure from the two airplane mishaps in 2014 and major flooding in December 2014 are likely to be manageable for the industry as a whole, given the relatively low penetration ratio.

Fitch does not expect the adoption of a goods and services tax from April 2015 in Malaysia to adversely affect the industry's performance. The agency believes premium growth will remain stable overall, underpinned by growing disposable incomes, rising consumer awareness and risk sophistication. Broader distribution networks and new product offerings by insurers and takaful operators will continue to support the industry. The industry's capital strength measured by risk-based capital ratio was strong at 253% in 2014 despite the regulatory hurdles and is well-supported by insurers' surplus growth.

The 'Malaysia Insurance Market Dashboard 2015' is available at www.fitchratings.com or by clicking on the link in this media release. Contact: Thomas Ng Analyst +65 6796 7224 Fitch Ratings Singapore Pte Ltd 6 Temasek Boulevard #35-05 Suntec Tower Four Singapore 038986 Siew Wai Wan Senior Director +65 6796 7217 Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com. Additional information is available on www.fitchratings.com ALL FITCH CREDIT RATINGS ARE SUBJECT TO .

Business ‘General Insurance detariffication likely to be partial’

Read more:http://www.theborneopost.com/2015/03/21/general-insurance-detariffication-likely-to-be-partial/#ixzz3V10l9GNn

KUCHING: The possible General Insurance (GI) detariffication of motor and fire insurance is likely to be ‘partial’ as there will be premium bands to prevent the risk of under-pricing premiums relative to risk.

Hence, analysts observed that this eliminates the risk of a probable severe GI margin erosion due to irrational competition.

RHB Research Sdn Bhd’s (RHB Research) channel checks suggest that the GI detariffication of motor and fire insurance may materialise in the second half of 2016 (2H16).

“Theoretically, GIs should not under-price a product if it bears a high loss ratio and places a heavy strain on its capital adequacy ratio (CAR).

“This effect caused the collapse of the GI industry in other countries when they experienced full detariffication together with absent strong regulatory capital enforcements.

“BNM is aware of this fact and stated that the risk of industry underpricing would be mitigated by applying premium bands, improving under-writing (UW) standards and continuing to enforce strict capital buffering requirements.

“We think the premium band is essentially a form of restricted deviation on premium change for motor and fire insurance products,” the research firm explained.

It added, “Given the higher CAR for GI, we take it as a leading indicator that the industry players may be adding further buffers to preserve capital in anticipation of uncertainties – which amongst others include the industry detariffication for GI and the life insurance (LI) framework for LI, and possible indication of heightened competition, given that some insurance players may have greater appetite to underwrite riskier businesses.”

Taking into account the possible changes in product pricing and competition, RHB Research said it expected the detariffication to not only be ‘partial’ but also gradual.

“We retain our assumption of a slight decline in UW margins for the GI insurers in the financial year 2016 (FY16) from FY15, though we do not foresee further downside risks in margins in FY16,” it said.

The research firm projected a six to nine per cent gross premium growth for GI and general takaful (GT) insurers in FY15, in line with the softened economic growth similar to FY14’s.

Meanwhile, on the growth of LI and family takaful (FT), RHB Research said the insurances’ long-term growth is expected to be anchored by low penetration.

It explained, “According to Life Insurance Association of Malaysia (LIAM), the low penetration rate, which is 54 per cent of the population insured, indicates that LI and FT players have more opportunities to reach out to policyholders in urban, suburban and rural areas.”

LIAM also believes that the remaining 46 per cent could be concentrated in rural areas.

RHB Research said, “Additionally, developing products to suit the different life stage needs of customers and introducing new delivery channels to reach out to this 46 per cent is possible.

“Cross-selling initiatives could also be leveraged for the 54 per cent insured to cater for areas of insurance needs that are still inadequate.

“All these are in line with our own estimates of Malaysia’s low LI and FT penetration rate of 54 per cent of the population insured, 3.1 per cent premium to gross domestic product (GDP) and 1.59-times sum insured over gross national income per capita for 2014.”

The research firm also believed Malaysia’s LI’s longterm growth could be dictated by a rising middle income population as the United Nations sees Malaysia reaching ageing population status by 2030.

It noted ageing population status is more than 15 per cent of the population age is more than 60 years old.

Aside from that, the research firm highlighted that mergers and acquisitions (M&A) have multiplied for insurers in the past few years at an averaged 2.3-folds P/BV, with transactions for GI and GT reportedly between 1.1 to 2.4-folds and LI and FT said to be higher at two to 3.2-folds.

It projected a moderate sector earnings growth of eight to nine per cent from its double-digits forecasts.

Read more: http://www.theborneopost.com/2015/03/21/general-insurance-detariffication-likely-to-be-partial/#ixzz3V10wb02Q